NRI Buying a Plot in India 2026: FEMA Rules, Restrictions and Safe Structures

This is buyer guidance, not legal advice. Consult a registered property lawyer and a FEMA-compliant chartered accountant for your specific situation.

Every year, thousands of Non-Resident Indians attempt to buy plots in India — and a significant number run into legal complications that could have been avoided with a basic understanding of FEMA. Some buy agricultural land through a Power of Attorney without realising it is categorically prohibited. Others remit money through informal channels and find they cannot repatriate sale proceeds later. This guide covers the rules clearly so you can buy with confidence.

What FEMA Says About NRI Plot Purchases

The Foreign Exchange Management Act, 1999 (FEMA) governs how NRIs and Persons of Indian Origin (PIOs) can own, acquire, and transact immovable property in India. The primary provision is Section 6(4) of FEMA 1999, read with Schedule I of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations.

The rules distinguish sharply between property types:

Permitted without RBI approval: NRIs (Indian passport holders residing outside India) may purchase residential and commercial immovable property in India. This includes residential plots (approved layouts), commercial plots, and built-up residential units. No prior approval from the Reserve Bank of India is required for these transactions.

Not permitted: NRIs cannot purchase agricultural land, plantation property, or farmhouses in India. This prohibition is absolute — there are no exceptions and no approval route through the RBI for these categories.

For Persons of Indian Origin (PIOs — foreign passport holders of Indian descent who are not Indian citizens), the same rules apply under RBI regulations, provided the country of citizenship is not Pakistan or Bangladesh.

Overseas Citizens of India (OCI cardholders) are treated on par with NRIs for all FEMA purposes, with the same permissions and the same restrictions on agricultural land.

Plot Types NRIs CAN Buy

NRIs can legally purchase the following categories of plots without any RBI approval:

• Residential plots in DTCP/HMDA/RERA-approved layouts: Any plot in a layout sanctioned by a competent planning authority — such as the Directorate of Town and Country Planning (DTCP) in Telangana and Andhra Pradesh, the HMDA in Hyderabad, the BDA or BBMP in Bangalore, or CIDCO in Maharashtra — qualifies as residential property and is freely purchasable.
• Plotted developments by RERA-registered developers: A plotted development project registered under the Real Estate (Regulation and Development) Act, 2016 with the relevant state RERA authority is the safest category. RERA registration means the developer has disclosed all approvals and the project is subject to regulatory oversight.
• Commercial plots in approved industrial or commercial zones: NRIs can also buy commercial plots in KIADB, MIDC, or similar industrial authority zones, subject to the payment and repatriation rules below.

There is no limit on the number of residential and commercial properties an NRI can own in India.

Plot Types NRIs CANNOT Buy

The following property categories are explicitly prohibited for NRI purchase under FEMA Schedule I:

• Agricultural land: Any land classified as agricultural in revenue records cannot be purchased by an NRI, regardless of its actual use at the time of sale. This includes land in the process of DC Conversion — until the DC Conversion order is issued and the land is formally reclassified, it is agricultural land.
• Plantation property: Coffee, tea, rubber, cardamom, and similar plantation land is prohibited. Karnataka, Tamil Nadu, and Kerala have significant plantation acreage that is sometimes offered to NRIs through indirect structures — these are non-compliant.
• Farmhouses: A farmhouse, in Indian legal definition, typically sits on agricultural land and retains agricultural classification even if used for weekend recreation. NRIs cannot buy these.

The prohibition applies regardless of the purchase structure. Buying through a company, a trust, or a Power of Attorney does not make an otherwise prohibited purchase legal for an NRI. The RBI has specifically clarified that indirect acquisition through a domestic company (where the NRI is the primary beneficiary) of prohibited categories of land is also non-compliant.

Inheritance is the only exception: an NRI who inherits agricultural land from a resident Indian relative may hold it, though they cannot purchase additional agricultural land and must take specific steps to notify the RBI.

How to Buy: Payment Channel Rules

FEMA is not just about what you can buy — it is equally strict about how you pay. All payments for immovable property in India by an NRI must comply with the following channel requirements:

• NRE Account (Non-Resident External): Funds in an NRE account are freely repatriable (you can send them back abroad without restriction). Plot purchase payments made from NRE funds can be repatriated when you sell, up to the amount of original NRE investment. NRE accounts hold foreign income converted to rupees.
• NRO Account (Non-Resident Ordinary): NRO accounts hold Indian-origin income (rent, dividends, interest). Funds from NRO accounts can be used to buy property, but repatriation of sale proceeds sourced from NRO funds is restricted to USD 1 million per financial year and requires a chartered accountant's certificate (Form 15CB) and RBI Form 15CA.
• FCNR Account (Foreign Currency Non-Resident): FCNR deposits are in foreign currency and are freely repatriable. Using FCNR funds for property purchase follows the same repatriation treatment as NRE funds.
• Direct inward remittance: Foreign currency remitted from overseas through normal banking channels (SWIFT) and converted to rupees at the point of receipt is treated as equivalent to NRE funds for repatriation purposes.

What is NOT permitted: Travellers' cheques, foreign currency cash, and informal hawala transfers. Any payment outside the approved banking channels makes the transaction non-compliant and jeopardises repatriation rights. In practice, sub-registrar offices in India do not ask about payment source — but this does not make non-compliant payments legal.

Power of Attorney — Safe or Not?

Many NRIs buy property in India through a Power of Attorney (PoA) given to a trusted family member or friend because they cannot travel for the registration. The PoA is legally valid for this purpose, but there are important risks and limits to understand.

The Supreme Court clarification (2011): In the landmark case Suraj Lamp and Industries vs. State of Haryana, the Supreme Court ruled that a General Power of Attorney (GPA) sale — where property is transferred through a PoA without executing a registered sale deed — does not create valid title. For NRIs, this means the PoA must be used only to execute a proper registered sale deed at the sub-registrar's office, not as a substitute for registration.

The "irrevocable" GPA controversy: Sellers and agents sometimes offer to execute an "irrevocable GPA" as a security arrangement. For NRIs, this is particularly risky because an irrevocable GPA given to an agent who turns hostile can create title disputes that are extraordinarily difficult to resolve from abroad. Always execute a proper registered sale deed; do not accept GPA as a substitute for registration.

Safe PoA structures: A specific PoA limited to a defined transaction (registering one specific property, on specific terms, by a specific date) is far safer than a general PoA. The PoA should be notarised in the country of residence, apostilled under the Hague Convention (if applicable) or attested by the Indian Embassy/Consulate, and authenticated before use in India.

TDS on Plot Purchase by NRI Seller — What the Buyer Must Do

If you are buying a plot from an NRI seller, you have TDS obligations under Section 195 of the Income Tax Act regardless of whether the property is residential or commercial.

• TDS rate is 20% on the Long-Term Capital Gain (LTCG) if the NRI has held the property for more than 24 months. For Short-Term Capital Gain, TDS is at 30%.
• However, since the buyer often cannot calculate the exact LTCG, standard practice is to deduct TDS at 20% on the entire sale consideration unless the NRI seller produces a lower-deduction certificate (Form 13) from the Income Tax Department.
• The buyer must deposit the TDS using Form 26QB within 30 days of the month of deduction.
• Before the sale deed is registered, the NRI seller's chartered accountant must issue Form 15CB (a certificate verifying that the correct tax has been calculated and paid). The buyer requires this to comply with Section 195.
• The NRI seller must file Form 15CA (a declaration to the Income Tax Department about the remittance).

Many buyers of NRI-owned plots are unaware of these obligations. Failure to deduct TDS makes the buyer personally liable for the uncollected tax plus interest and penalties. Do not register the sale deed without confirming TDS compliance.

Repatriation of Sale Proceeds

When an NRI sells Indian property and wants to send the proceeds abroad, the repatriation rules depend on how the original purchase was funded:

• If purchased with NRE/FCNR funds or inward remittance: Sale proceeds can be repatriated in full, subject to a limit of the equivalent of the amount originally paid (capital only). The balance (any appreciation in rupee terms) can also be repatriated up to USD 1 million per financial year after tax payment, from the NRO account where it lands.
• If purchased with NRO funds: Repatriation of sale proceeds is limited to USD 1 million per financial year. This limit is aggregate across all remittances in the year, not per property. If you are selling multiple properties, coordinate with your CA carefully.
• The repatriation process: The NRI seller instructs their Indian bank to remit funds abroad after producing Form 15CA, Form 15CB, the sale deed, and a self-declaration. The bank processes the remittance through the authorised dealer channel.

The USD 1 million limit is a hard cap per financial year (April to March). If your property sale proceeds exceed this, you will need to plan the remittance across multiple financial years.

Top 5 Safe Plot Investments for NRIs in 2026

Based on legal clarity, infrastructure maturity, and appreciation fundamentals, the following areas offer the strongest risk-adjusted thesis for NRI plot investment in 2026:

1. Devanahalli-KIADB corridor, Bangalore: Airport-adjacent, NH 44 connectivity, genuine IT employment demand. Look for RERA-registered plotted developments with BDA or KIADB-origin land (not gram panchayat).
2. Hyderabad ORR (Outer Ring Road) — Shamshabad to Patancheru: ORR corridor appreciation has been among the strongest in India over 2021-2026. Choose HMDA-approved layouts, verify HYDRAA/FTL clearance specifically.
3. Pune PMRDA zones — Talegaon and Chakan: Maharashtra's PMRDA (Pune Metropolitan Region Development Authority) zones offer transparent approvals and strong industrial employment demand from the Chakan auto-component cluster.
4. Chennai OMR-ECR fringe — Mahabalipuram corridor: CMDA-approved layouts in the ECR corridor offer legal clarity and tourism/IT demand drivers. Verify DTCP approvals.
5. Navi Mumbai CIDCO plots: CIDCO-approved plots have the strongest legal clarity of any plotted product in India — direct government allotment, no intermediary developer risk. Secondary market prices are premium but fully transparent.

Brickplot's NRI Plot Buying Checklist

• Confirm the land is classified as residential/commercial in revenue records — not agricultural, plantation, or farmhouse.
• Verify RERA registration of the plotted development project.
• Open an NRE account if you intend to repatriate sale proceeds later — use it for the purchase payment.
• Execute a specific (not general) PoA if you cannot travel for registration; get it apostilled or consulate-attested.
• Appoint a FEMA-compliant CA in India to structure the transaction and handle Form 15CA/15CB.
• If buying from an NRI seller, confirm TDS deduction and Form 15CB before registration.
• Maintain documentary evidence of payment channel (bank transfer records, NRE account statements) for future repatriation.
• Get a 30-year Encumbrance Certificate from the sub-registrar's office before finalising the sale deed.